Well I have already checked off all IOS overrides and everything is in truecolor.
To check one more time, I simply sent my atlas file to the device with dropbox and the same problem exists there as well. I did the same thing with other images and same issue is there. When I take a screenshot from my game and then I transfer that image to my computer, everything looks as it should. Very strange.
You can do the same test. Just take a screenshot from any game or simply transfer an image from your computer to ipad and then look at both pictures on both devices. I tested this with an ipad2 and an ipad mini(non retina) and both had the same results. Images are non unity generated(simple background I found on internet for ipad). I am attaching the bg for you to test out.
I just tested on a 5th generation Ipod and it seems it is not effected. So far Iphone 4, ipad mini and ipad 2 seems to be effected.